Removing palm oil from supply chains is not the answer. We believe it's only through working with the industry that real change will happen.

Iceland, one of the UK’s largest supermarket retailers, recently took the decision to ban palm oil from its own-brand products by the end of 2018, promising that this will reduce demand for palm oil by more than 500 tonnes a year.

“Until Iceland can guarantee palm oil is not causing destruction, we are simply saying ‘no to palm oil,” said Richard Walker, Iceland’s managing Director, in a statement. “We don’t believe there is such a thing as verifiably ‘sustainable’ palm oil available in the mass market.”

Cutting palm oil out of products isn't the solution

At TFT, we could understand Iceland’s decision and are well aware that palm oil has been responsible for vast swathes of deforestation and has been struggling to address workers’ rights and more. We agree with Iceland on one major point: the palm oil industry needs to change. But we do not believe that cutting palm oil out of products is the solution.

“Iceland’s decision demoralises the industry, farmers and, in particular, companies who have embarked on a change journey,” said Fahreza Hidayat, a palm oil lead for TFT Indonesia. “Punishment sometimes works in affecting change. But too much punishment, of the kind Iceland is pursuing, is likely to discourage any change at all levels within the industry. Why would the industry continue to change if no one is asking them to do so?”.

“Totally cutting out palm oil is an easy way out that doesn’t change the reality on the ground. In fact, it only adds to the burden of other committed actors in the supply chain who are trying to bring about positive transformation,” added Karl Yen Quek, TFT’s Regional Leader in Malaysia. “For every company choosing to follow Iceland’s footsteps, the leverage and opportunity to remedy the complex issues surrounding palm oil – like deforestation, and social challenges – diminishes. At the end of the day, those issues will remain, and repercussions will still affect companies like Iceland and the entire world if no positive action is taken.”

We believe that Iceland’s palm oil pledge, although it may seem like a bold move at first glance, may lead to a wave of palm oil bans from companies. This could easily squash the shoots of progress that we have seen grow, in the palm oil supply chain, before they’ve had time to truly develop. Companies like Iceland are in a position to help clean up palm oil, but by cutting it out, they are also cutting their own power to effect change and they are ignoring the reality that palm is here to stay.

“With global food demand continuing to grow alongside the global population, forests will remain under pressure unless those involved in the production of all major agricultural commodities including soy, beef and palm oil commit to a growth model that allows forests to remain standing,” explained Paul Corletto, a TFT Project Manager working on palm oil in Malaysia.

Only by working with those inside and outside the palm oil industry, fostering dialogue and transforming the industry from within, can real and lasting change be attained.

The palm oil we all want

When TFT first started working on palm oil, the industry was very different.

In just under ten years, we’ve seen “No deforestation”, “No peat” and “No exploitation” commitments develop where there were none; as of 2018, 469 companies have made such commitments across palm oil and other commodities. This alone has halted hundreds of bulldozers from advancing on Indonesian forests, which are part of six million hectares of stranded assets that can no longer be developed on, thanks to those commitments. While in Indonesia and Malaysia, almost no refineries were working with sustainability policies when TFT started its work there in 2010, as of 2017 such policies cover 74 percent of palm oil going to refineries.

We’ve also seen transparency develop in a supply chain that was completely opaque, thanks in part to the development of companies’ online dashboards and the publication of mill lists. Ten years ago, nobody could have imagined that companies like Nestlé and GAR would be publishing their complete mill lists. This has been a huge step for transparency in palm oil.

“Traceability has enabled companies to know who their suppliers are,” said Hilary Kung, a TFT Project Officer working on palm oil. “This has evolved into our understanding what the issues are and whether they are within companies’ capacity to change. We can now also say what other areas require wider collaboration from government, NGOs or other bodies. This has helped change the company-NGO relationship from being defensive to one of constructive dialogue.”

Of course, issues remain, and change has not come as fast as we would like. Certain players in the palm oil industry do deserve to be treated harshly as there has simply not been enough progress on all fronts. That said, positive change is clearly happening. Many brands and companies are on board and are keen to make a difference. We’ve witnessed this first hand on the ground; the shoots of progress are clear to see.

Improving labour conditions

For example, there is now a greater understanding of what constitutes forced labour and forced labour indicators such as passport retention are now being addressed throughout the industry in Malaysia. By joining together with civil society, brands, suppliers, plantations and mills and other industry members, we’ve contributed to putting passports back in the palms of thousands of workers with our members.

“This movement has the potential to cascade into a nation-wide chain-reaction. Cutting palm oil out of supply chains could impede such chain reactions while also having a negative impact on the livelihoods of smallholder farmers, local communities and migrant workers who rely on the sector,” said Natasha Mahendran, Social and Human Rights Manager at TFT.

Our film, see below, shows the work we have done with Wilmar and Kim Loong Palm Oil Mill to put passports back in workers’ palms.

Tangible successes like this show that by collaborating, and not shutting people out, great things can happen and lives, and landscapes can feel the benefits.

That is why, instead of pulling out of the palm oil fight, TFT strongly believes companies like Iceland should engage more closely with their supply chain and utilise the transformation tools that are out there. What we would like to see is strong commitments from brands, followed up by investment in transformation and active innovation to enact these pledges.

But we are also uncomfortable with the personal attacks made against Iceland in recent days by certain palm oil activists. This is not helpful in fostering a working relationship. “This fight is not about companies versus the palm oil industry, Malaysia versus Europe, or palm oil versus the rest of the world,” said Bastien Sachet, TFT’s CEO. “Our fight is for the health of our planet. It’s only through working together – between industry, the private sector, NGOs and everyone else in between – that we’ll win it.”

“That’s why we would like to see companies, suppliers and the palm oil industry as a whole implementing full transparency to source for their palm products; we want to see them pushing for third-party satellite verification of no deforestation; working together with smallholders and engaging with third-party suppliers to end deforestation, all these are changes that society wants to see. All in all, companies and the palm oil industry must be bold and ambitious, accountable to the entire world and, above all, willing to work together. Only then will we see transformation and begin to build the sustainable palm oil industry that we all want."